Hemfosa Completes Largest Swedish Transaction of 2018

Sweden
Hemfosa acquires a portfolio from Starwood and Scius Partners for SEK 3.6 billion (EUR 349M), the largest Swedish transaction of 2018 this far. The 51 properties are to be part of the newformed company Nyfosa.

The property portfolio comprises 51 properties totaling approximately 460,000 square meters with an gross rental income (annual rental income including all supplements) of MSEK 318. The properties are located in 17 towns and cities, mainly in central and southern Sweden, including Stockholm, Malmö, Västerås, Borås and Lund. Tenants include Speed Logistics, DHL Nordic, Haldex Brake Products and PostNord Sverige and the average remaining lease term is 3.4 years. The expected date of transfer for the properties is September 13, 2018. Scius Partners has represented the seller as their local operating partner. The acquisition is subject to the condition that the Swedish Competition Authority (Sw. Konkurrensverket) decides to approve or leave the acquisition without action.

“This is a portfolio that generates high earnings and is an ideal fit with the strong portfolio of commercial properties we own, in addition to our community service properties, and that we have gathered together in the subsidiary Nyfosa ahead of the intended division of the Group. The properties are a good geographical complement to the commercial portfolio and also in the offices and warehouse/logistics property categories. The transaction also provides us with an opportunity to resell certain properties in combination with the existing portfolio,” says Jens Engwall, CEO of Hemfosa.

“We are pleased that we have succeeded in repositioning this diverse portfolio which at acquisition consisted of office, hotel, retail and warehouse/logistics assets into a well-managed and well- performing warehouse/logistics portfolio for which Hemfosa, as an institutional buyer, is the most natural long-term owner,” said Richard Vaaje, Senior Vice President at Starwood Capital Group. “Sweden and the Nordic region remains a core focus area for us and we are pleased with the value we have unlocked for our investors with the acquisition, management and now divestment of the majority of the Swedish portfolio.”

“During our ownership we have by actively investing into the portfolio increased occupancy, lettable area, lease terms and rental levels,” added Mikael Freudmann, CEO of Scius. “In addition, we have initiated planning for more than 200,000 sqm residential building rights in Västerås, Stockholm and Lund.”

Pangea Property Partners is acting as financial and M&A advisor to Starwood in connection with the transaction.